Yesterday’s gap up opening was a classical case of a ‘Bull Trap’ and the Nifty index took a sharp U-turn after entering inside the Monday’ gap area. Subsequently, the selling pressure accelerated during the second half in that pessimism Nifty broke the crucial support of 10276 and eventually closed below the same. At this juncture, Nifty confirmed its breakdown from triangle pattern which don’t augur well. Going forward, Nifty likely to correct further and test the daily 200-SMA pegged near 10130 below which the retest of weekly swing low of 10033.35 can’t be ruled out. On the other side, 10360 / 10450 will act as a near term resistance.

Bank Nifty Spot Chart

For the fifth consecutive session, the Nifty Bank index ended inside the negative territory and lost 1.49% on Tuesday. Barring the first few minutes of trade, the index remained under tremendous pressure and eventually ended well below daily 200-SMA. On a daily chart, index broke the PR trend line which doesn’t augur well for bulls and also index convincingly broke the weekly swing low of 24617. At this juncture, the daily chart still signals a bullish divergence hence any meaningful bounce if any, should be used to add fresh short position.